Wednesday, August 1, 2012
The loss of potential sales tax revenue from the sale of beer and wine, either by the glass or by the package, is not insignificant, according to local business owners.
Restaurants both locally and nationally find the sale of alcohol — beer, wine or distilled spirits — to be one of the highest profit margin items on any menu.
And what is true in eateries licensed to sell alcoholic beverages is also true for groceries, convenience stores and other outlets that offer package sales — bottles, boxes, cans or kegs — of alcohol for off-premises consumption.
During the discussion as to whether or not voters will decide if Sunday sales are allowed in Fort Oglethorpe, letters from a number of businesses supporting such sales were presented to each member of the council.
Not only were written statements provided the Fort Oglethorpe City Council before members considered adding referendums to the November ballot that would allow retail sales of alcoholic beverages on Sundays, a local retailer answered questions about how projected sales are calculated.
Letters were presented that indicate that several local establishments could expect more than $1.5 million in additional sales if they could legally sell beer and wine on Sunday.
The Fort Oglethorpe store has been the only Walmart or Sam’s Club store operating in the surrounding area that did not sell alcoholic beverages, but that will change this month.
“The Walmart on Battlefield Parkway will begin offering beer and wine for sale as soon as we have the necessary licenses from the city and state,” said company spokesman William C. Wertz.
Previously, such sales were proscribed because the adjacent Battlefield Church of the Nazarene operated a private school. Though the church still operates a pre-K program, Noah’s Ark, the school’s closure means the world’s largest retailer will soon be able to offer fermented beverages to its customers.
Walmart and other retailers consider the sale of beer or wine as part of an overall shopping experience — people buy such beverages in addition to buying food and other items.
While the figures seem large, potentially hundreds of thousands of dollars in annual sales per location, there are potential consequences beyond lost sales tax revenue from alcoholic beverage sales. Though Fort Oglethorpe Councilman Johnnie “Red” Smith said he did not consider it possible, City Manager Ron Goulart said the prospect of businesses asking to exit the city is real.
“De-annexation is very possible and is something the city has had to deal with in the past,” Goulart said. “One of my fears is that Costco might ask for de-annexation if the county approves Sunday package sales. The amount of revenue is huge, and the city would be at a great disadvantage if it is the only place within the county that won’t allow sales of alcohol on Sunday.”
Goulart said there are three possible ways for de-annexation: by agreement, by litigation or by special act of the legislature.
Several years ago, when Fort Oglethorpe and Ringgold seemed in a race to see who could bring the most territory within its borders, state lawmakers de-annexed portions of Cloud Springs Road and Battlefield Parkway that Fort Oglethorpe had claimed.
Within the past three or four years a special act by the state Legislature permitted the city’s annexation of land along U.S. Highway 41, Mack Smith and Cloud Springs roads that abutted the state line at East Ridge.
Issues regarding sewer, utility and public works services can also become part of any legal action regarding areas that are being or have recently been annexed.
There is also the possibility of having to deal with “grandfathered” establishments that are licensed for Sunday sales — should the referendum be approved for the unincorporated areas of Catoosa County — that might be annexed into the city at a future time.
Costco is not the only major retailer that could seek de-annexation. The southern boundary of the Walmart property abuts a portion of land outside either Fort Oglethorpe or Ringgold.
“This could lead to costly legal wrangling,” Goulart said.